Egypt

Egypt

Analysis - Will Egyptian unrest halt ambitious wind plans?

23 July 2013
by Jan Dodd

EGYPT: Just as the Egyptian wind power sector was showing signs of recovery, the market has been plunged into uncertainty again by the toppling of the country's first democratically elected government.

Egypt is developing projects near the Gulf of Suez

While it is still early days, some observers are confident that the new government will continue to push things forward with requests for up to 850MW of new capacity over the last six months.

One positive sign is that the former energy minister, Ahmed Mostafa Emam Shaaban, kept his job in the interim government, providing some all-important continuity. However, there are other reasons to remain optimistic. According to one industry insider familiar with the market, Egypt's power situation is so critical that any new capacity that can be built reasonably quickly is being taken seriously.

In this regard, those projects already under way are unlikely to be affected, especially those backed by development finance institutions with funding already in place. These include the 200MW Red Sea plant being built by Gamesa, which is still on schedule for commissioning next year.

The auction of six plots totalling 600MW being offered to the private sector is also going ahead. The deadline for bids keeps being pushed back, but this is because the request for proposals left too many unanswered questions, according to Usama Said, head of GL Garrad Hassan's Cairo office. Once that is resolved, however, it remains to be seen how many companies submit bids. "Until Egypt reaches some sort of political stability, it is difficult to say how much risk companies will take," said Silvia Macri, regional specialist at global wind consultants IHS Emerging Energy Research.

Other questions concern the extent to which development finance continues to support the sector and which technologies the government decides to prioritise. "The overall renewables target probably won't change, but the way of implementing it might," Macri warned.